Merger would create Berrien bank contender

The proposed merger of New Buffalo Savings Bank and St. Joseph-based Edgewater Bank would create the third-largest bank measured by deposits in Berrien County.

The merger of the two privately held banks was announced last week, and bank officials expect it to become final this fall.

Though New Buffalo Savings will take the name of its larger partner, president and CEO Ron Farina will remain CEO of the new Edgewater Bank for the south of Berrien County. Robert Baldwin, current CEO of Edgewater, will become CEO for the north portion of Berrien County.

Officers and directors of both banks have been working on the merger for more than a year, according to the April 11 announcement.

"What really motivated this merger is that we are both mutual banks," Farina said. "Neither one of us has an interest to convert to stocks, so this transaction is very clearly not a conversion to stock, not an acquisition, and it is truly a partnership.

"When you combine both banks into a larger institution that covers a larger, broader market area, it does give us larger lending authority," Farina continued. "We'll be able to look at projects that were too large for us to look at before."

The new bank won't go after those immediately as the regulatory process of merging typically takes four to six months, he said.

At the end of the first calendar quarter, the two bank's combined assets totaled over $300 million. Their combined deposits amounted to more than $225 million.

Edgewater Bank had six sites, including the St. Joseph main bank, and in the most recent report from the Federal Deposit Insurance Commission it had a 6.27 percent share of the Berrien County market. New Buffalo Savings, with three locations, had 4.06 percent of the market.

Together they will rank third in the county behind Cincinnati-based Fifth Third Bank [Nasdaq: FITB], which had a 32.49 percent share in the FDIC report, and Chemical Bank, with a 22.54 percent share.

Because the two local banks do not overlap geographically, they do not intend to cut any employees when the merger becomes final.

The current president of Edgewater, William Peterson, will become president of the combined entity. New Buffalo Savings officers Ann Werner and Mary Ann Vanderbrook -- Farina's sister -- will remain executive officers, as will Edgewater's Janice Groendyk. The new board of directors will be composed of six directors each from the two banks.

Edgewater changed its name from LaSalle Federal Savings Bank and relocated from Buchanan to St. Joseph within the past three years. The banking entity was founded 98 years ago.

New Buffalo Savings Bank was New Buffalo Building and Loan for the early part of its 87-year history. Farina's parents bought the Building and Loan in 1948 and he took over as president in 1980, guiding its expansion in Three Oaks and Sawyer.